Jim Renacci Calls Sherrod Brown’s Talking Points on Tax Cuts ‘Inaccurate Scare Tactics’

In his debates with Rep. Jim Renacci (R-OH-16), on the campaign trail, and in op-eds, Sen. Sherrod Brown (D-OH) has repeatedly hammered the Trump tax cuts as an incentive for corporations to ship jobs overseas.

“Under their law, companies earning profits in Hamilton County pay a 21 percent tax rate. But if those companies send jobs to Wuhan, China or Reynosa, Mexico, they owe just a 10.5 percent rate on some of those overseas profits,” Brown wrote in an op-ed for The Cincinnati Enquirer. “It’s like handing out 50 percent off coupons to corporations that send jobs overseas.”

This is a false claim, because the tax-reform package passed last year contains no such “50-percent off coupon,” says Renacci, who is a CPA and helped write the bill.

Renacci tweeted that the law in place actually does exactly what Brown has said is needed to keep American jobs from vanishing overseas. It gives companies an incentive to create and retain those jobs here in the United States.

Before the Tax Cuts and Jobs Act (TCJA), companies that moved jobs overseas were paying a zero percent U.S. tax after tax planning. It was a loophole that seemed tailor made for large, multinational corporations looking to avoid paying the high U.S. corporate tax rate.

Under the TCJA, not only has the corporate tax rate been cut to make America more competitive, but a new provision known as GILTI ensures that U.S. companies making profits from plants overseas will pay a 10.5 percent tax on revenue that was not taxed under the old law.

In other words, it was a provision that closed a tax loophole and ended up being a tax increase on these jobs-outsourcing companies – not a cut. In fact, the Joint Committee on Taxation estimates this tax will bring in $112.4 billion in new revenue between 2017 and 2027.

In the first debate, Renacci suggested that Brown may not have read the TCJA before reflexively voting against it. He knew he could not vote for the bill because it had the branding of the Republican Party and, even worse for Democrats, it bore the presidential stamp of approval.

Renacci says that if Brown did read the bill, he must not have understood it.

“Sherrod Brown is irresponsibly and purposefully using inaccurate scare tactics to validate his terrible vote against giving Ohio families and extra $2,000 [per year],” Renacci told The Ohio Star on Tuesday.If Brown had actually read the Tax Cuts and Jobs Act or even had any basic understanding of tax law, he would know this provision actually closed a loophole that allowed companies which moved jobs overseas to avoid paying taxes.”

Now, because of the tax cuts that Brown opposed, “the government expects to bring in an additional $112 billion in revenue from this one provision alone – compared to $0 before,” Renacci added.

So, Brown’s claim that the tax-cut law rewards companies for relocating facilities overseas is false.

According to a report by tax expert Eric Toder at the nonpartisan Tax Policy Center, the TCJA “follows the basic outlines of proposals introduced in recent years by leaders from both parties,” including  former House Ways and Means Committee Chair Dave Camp (R-MI)Sen. Rob Portman (R-OH) and Sen. Chuck Schumer (D-NY), as well as the Obama Administration, Toder explains.

Toder and the Tax Policy Center have also produced a table summarizing how the TCJA implements these changes.

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Anthony Accardi is a writer and reporter for The Ohio Star.

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